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What are the causes behind a negative stub value?

Flux does a nice job in outlining that the scenario described in this question is an example of a negative stub value. I'm now interested in understanding why negative stub values occur? Isn't this an example of an arbitrage opportunity that should immediately be corrected?

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From Can the market add and subtract? in Chicago Booth Review

While these negative stub situations present attractive arbitrage opportunities, the high returns Lamont and Thaler calculated are difficult to realize due to problems with shorting the subsidiary.

The chief obstacles to arbitrage in these cases were short sale constraints, which make shorting very costly or impossible. In some cases, institutions or individuals may be unwilling to lend their shares to short sellers, the cost of borrowing the share may be too high, or the demand for shares may exceed what the market can supply, creating a price which is too high.

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If irrational investors are willing to buy Palm at an unrealistically high price, and rational but risk averse investors are unwilling or unable to sell enough shares short, then two inconsistent prices can co-exist.

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Isn't this an example of an arbitrage opportunity that should immediately be corrected?

Limited Arbitrage in Equity Markets by Mark Mitchell, Todd Pulvino and Erik Stafford examined the difficulties in arbitraging 82 negative stub value situations between 1985 and 2000. They found that 30% of those situations terminated without a price convergence. Furthermore, in those situations where the price did converge, it could take years for the convergence to occur, which produces an unattractive rate of return. These "arbitrage opportunities" are less attractive than they appear to be.

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